Thank a visitor
Hotel-motel tax revenue increase benefit for city facilities, services
BY PHIL REYNOLDS SOUTH JETTY REPORTER

If the beach is a little cleaner next year, or you're finding more to like at Roberts Point Park, you might want to thank a visitor. Those improvements, if made, will be at least partially paid for through the city's 7 percent hotelmotel tax.

Of that 7 percent tax, 43 percent goes by law to advertising Port Aransas as a tourist destination (the Chamber of Commerce-Tourist Bureau does that under a contract with the city), another 43 percent goes into a beach fund and the remaining 14 percent goes into a special fund that can be used for facilities.

In the coming year, said assistant city manager and finance director Judy Lyle, that fund will probably be used to make improvements at the municipal harbor.

However, the city must be careful how it uses that tax revenue. State law limits its use to tourist-related projects. Examples, Lyle said, would be the city's birding facilities, the harbor improvements, Roberts Point Park or repair to the civic center (but not the city hall or city council chamber).

"Say, for instance, they put a roof over this whole (city hall-civic center) building," Lyle illustrated. "We would have to break it down by square footage and say, .This is city hall and this is tourist related.'"

The city council decides, with the city staff's help, how to spend that money - and money that comes in from other revenue sources - each August when it approves the budget for the coming year. That means when funds are designated for beach cleaning, for instance, it's not easy to move them to another use.

However, money that's collected through the hotel-motel tax and aimed at the beach fund can eventually wind up in the city's general fund.

"We designate hotel-motel money to the beach fund. We have a formula saying, .This is what it would cost us to clean this beach and have this equipment down there.' So the general fund rents to the beach fund all of that equipment and all of those people. That way that money already flows back into the general fund, so it's not really freeing it up."

In the upcoming 2006-07 budget, the council has designated 1 cent of the 3 cents in the beach fund for tourist related facility repairs. It's the first time the city has done that.

Lyle's fairly consistent good news to the council in her monthly finance report is that revenue from the hotelmotel

tax is continuing to grow. She believes that's because there are more hotel and motel rooms available in the city, not because there has been a major price increase in the cost of lodging.

She also credits the season.

"I just think we've had a good summer, and I think with the price of gas, people are taking shorter road trips. Our sales tax increased and our hotel-motel tax - it ended the year at about 12 percent up. Each year, it's increasing."

Income from the hotel-motel tax in the 2004-2005 fiscal year was $1.702 million, Lyle said. This past year that went up to $1.855 million, an increase of 8.98 percent.

The bad news is that the city isn't getting all the hotel-motel tax it should be getting.

People who rent out a residence are required to pay the city the 7 percent hotel-motel tax, as well as paying the state's 6 percent share.

However, "There have been individuals (in Port Aransas) who are renting their homes who aren't collecting or paying the 7 percent, and there have been condominium owners whose condos aren't in the rental pool, who rent out the condos themselves, who don't collect it," Lyle said.

That angers other condo owners because the non-payer can afford to rent his condo cheaper.

"If you have your own residence or if you have a rental unit that you are renting out, you are required by city ordinance and by state law to collect and submit that hotel-motel tax."

(Rental of a home for 30 days or more, however, is considered longterm and not subject to the hotel-motel tax.)

Why don't recreational vehicle (RV) parks collect a hotel-motel tax also, then? Because they aren't required to.

States that have tried collecting hotel-motel tax from RV parks have found that RVers simply go to other states, Lyle said. Either Florida or Arizona tried imposing a hotel-motel tax on RV parks, and then repealed it, she reported.